KwaZulu Natal Department of Social Development and Another v NUPSAW obo Mahlangu and Others (D227/12) [2014] ZALCD 58 (22 October 2014)

REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICAN, DURBAN

JUDGMENT

Not Reportable

Case no: D227/12

In the matter between:

KWAZULU NATAL DEPARTMENT OF SOCIAL

DEVELOPMENT

FIRST APPLICANT

SOUTH AFRICAN SOCIAL SECURITY AGENCY

SECOND APPLICANT

and

NUPSAW obo DS MAHLANGU

FIRST RESPONDENT

PSA obo D NEKO

SECOND

RESPONDENT

PSA obo M.E. MASONDO

THIRD RESPONDENT

COMMISSIONER G GERTENBACH

FOURTH RESPONDENT

PUBLIC HEALTH AND WELFARE SECTORAL

BARGAINING COUNCIL (PHWSBC)

FIFTH RESPONDENT

Heard: 10 January 2014

Delivered: 22 October 2014

Summary: Dismissal application – circumstances under which dismissal application may be granted includes inordinate delay in prosecuting the review application, failure to provide acceptable explanation for the delay and lack of prospects of success in the review application – those requirements were found to have been satisfied in this case and the dismissal application was granted and, consequently, the review application was dismissed.

MGAGA AJ

Introduction

“That a plaintiff may, in certain circumstances, be debarred from obtaining relief to which he would ordinarily be entitled because of unjustifiable delay in seeking it is a doctrine well recognised in English law and adopted in our own courts. It is an application of the maxim vigilantibus non dormientibus lex subveniunt.”[1]

[1] This is an application brought by the second and third respondents (jointly referred to as “respondents”) to dismiss the review application brought by the first and second applicants (jointly referred to as “applicants”) on the basis that the applicants have failed to prosecute their review application diligently. For the sake of convenience I will refer to the parties as they are cited in the review application.

[2] The first respondent in the review application (D.S. Mahlangu) is not a party in this application. During the hearing of this matter I was advised by Ms Naidoo (who appeared for the respondents) that the first respondent, who was also present at Court, abides by the decision of this Court.

Salient background facts

[3] The respondents were employed by the first applicant which at the time was, inter alia, responsible for managing and administering payment of social grants. In the main the respondents’ duties entailed receiving, capturing and processing the applications for social grants payments.

[4] The second applicant was established in terms of, inter alia, the South African Social Security Agency Act 9 of 2004 (“SASA Act”). It appears that the responsibility to manage and administer the payment of social grants was then transferred to the second applicant in accordance with the provisions of the SASA Act. The employees who were responsible for management and administration of social grants were also transferred to the second applicant in accordance with section 197 of the LRA[2]. The applicability of section 197 of the LRA was also conceded by Ms Ngqanda, who appeared for the applicants.

[5] It is not clear exactly when the transfer of employees to the second applicant took place. However, it appears to be common cause that the transfer took place after the commencement of the arbitration proceedings.

[6] The respondents were dismissed for misconduct in 2006. The essence of the misconduct charge against the respondents was fraud in that during 2001 and 2002 they allegedly approved fraudulent aged and disability grants which were made payable into fraudulent banking accounts. Despite the fact that the misconduct allegedly took place in 2001 and 2002 the respondents were only charged in 2004 and the disciplinary proceedings were finalized in 2006 when the respondents were eventually dismissed after an unsuccessful internal appeal[3].

[7] The respondents challenged the fairness of their dismissal by referring a dismissal dispute to the fifth respondent. The fourth

respondent (“the arbitrator”) was duly appointed to arbitrate the dispute.

[8] The arbitration hearing commenced sometime in 2007, but regrettably was only finalized approximately four years later when the arbitrator issued an arbitration award on 19 January 2012. In the award the arbitrator blamed the first applicant for not showing sense of urgency in having the arbitration finalized expeditiously. He also apologized for part of the delay occasioned by his own ill-health.

[9] In the arbitration award the arbitrator concluded that the dismissal of the respondents was substantively unfair and ordered the first applicant to reinstate them retrospectively. The arbitrator also ordered the first applicant to pay the respondents’ costs of arbitration.

Review application

[10] On or about 15 March 2012 the applicants brought a review application some 9 days outside of the prescribed time period. In their founding affidavit the applicants have sought condonation for the late delivery of the review application.

[11] The review application is based on a very narrow ground. The applicants do not take issue with the arbitrator’s conclusion

that the dismissal of the respondents was substantively unfair. The complaint is limited to the relief of reinstatement granted by the arbitrator. The crux of the applicants’ ground of review, as gleaned from the founding affidavit, is that the duties of the respondents have since been transferred to the second applicant. The second applicant has introduced new and improved business systems. Since the respondents have not been exposed to or trained in the new systems, their reinstatement would not be beneficial to the second respondent and would constitute a wasteful expenditure. It is stated that the respondents would become “inefficient employees”[4]. It is also averred that the Second Respondent has not budgeted funds for the employment of the respondents[5].

[12] The other ground of review advanced by the applicants is that it is impossible to implement the award because the first applicant “has been ordered to reinstate employees to perform a function which it does no longer perform”. The arbitrator is also criticized for not applying his mind to the implications of reinstating the respondents[6]. The applicants submit that, had the arbitrator applied his mind properly, because of impracticality of reinstatement, he ought to have awarded compensation to the respondents.

Applicable legal principles

[13] The competence of this Court to bar an applicant from proceeding with a review application or any other claim on account of inordinate delay in its prosecution is founded on the application of the maxim vigilantibus non dormientibus lex subveniunt. This maxim, which was adopted into our law as far back as 1927 in the Pathescope Union of SA Ltd case, loosely translated means: the laws serve the vigilant, not those who sleep upon their rights. The modern parlance ‘you snooze, you lose’ closely resembles the meaning of this ancient maxim. The rationale behind the application of the maxim is that litigants must vigilantly pursue their claims up to finality and without unnecessary delays. The risk of being barred serves as a catalyst that spurs the litigants on to prosecute their claims with diligence.

[14] The expeditious finalization of litigation is of prominent importance in labour disputes. One of the main objectives of the LRA is to promote expeditious and effective resolution of disputes. The dispute resolution mechanism established by the LRA is grounded on simplicity so that disputes can be resolved quickly and cheaply. However, this noble objective is often thwarted by litigants who, wittingly or unwittingly, drag their feet in prosecuting their applications or claims. An observation that non-compliance with time periods has become a rule rather than an exception, was aptly made by Nel AJ in Bezuidenhout v Johnston NO & others[7] at paragraph [25]. This general recalcitrance has to be nipped in the bud.

[15] In order to achieve expeditious finalization of labour litigation the starting point is that litigants must strictly comply with the time frames prescribed in the LRA and the rules of this Court, including the Practice Manual[8]. The litigants and other functionaries have joint responsibility to ensure timeous compliance with time frames. As dominus litis, an applicant has a primary responsibility, whereas the respondent has a secondary, but equally important, responsibility to ensure timeous compliance with time frames[9]. The joint responsibility enjoins the parties to police each other in ensuring timeous compliance.

[16] In Bezuidenhout v Johnson NO and Others this court held that:

‘At the same time, the respondent party must not sit by idly and bide his time, waiting for a particular undefined moment in time when the applicant party’s delay may enable him to apply to have the delaying party barred from seeking further relief or to have the matter dismissed by reason of delays in pursuing it. I am of the view that, if an applicant drags his feet, the respondent party also bears a responsibility to ensure that disputes are resolved expeditiously. This obligation of a respondent party is in my mind a primary one in respect of ensuring that applicant party complies with time periods applicable to it’.

[17] I fully associate myself with the above sentiments. In passing I may add that, at the very least, prior to instituting such a drastic (dismissal) application, the respondent party ought to first establish or enquire from the applicant party the progress (or the reasons for the lack thereof) that has been made in prosecuting the review application to the next level.

[18] In Karan t/a Karan Beef Feedlot & another v Randall[10] , Van Niekerk J, after referring to a number of relevant judgments, summarized the applicable legal principles as follows:

“[14] In summary: despite the fact that the rules of this court make no specific provision for an application to dismiss a claim on account of the delay in its prosecution, the court has a discretion to grant an order to dismiss a claim on account of an unreasonable delay in pursuing it. In the exercise of its discretion, the court ought to consider three factors:

· the length of the delay;

· the explanation for the delay; and

· the effect of the delay on the other party and the prejudice that

party will suffer should the claim not be dismissed.

This is subject to the consideration that an application to dismiss is a drastic remedy, and should not be granted unless the dilatory party has been placed on terms, and when appropriate, after any further steps as may have been available to the aggrieved party to bring the matter to finality have been taken.”

[19] Another important factor that this Court ought to take into consideration in exercising its discretion is the prospects of

success in the main application. If a dilatory party has no prospects of success in the main application, it will serve no purpose to allow it to proceed with an application that is doomed to fail. Very often it will be difficult to adequately assess prospects of success because in most instances the pleadings in the main application would not have closed. However, there are cases where prospects of success can be fairly assessed and determined even before pleadings have closed. This is one of such cases, as it will be demonstrated below.

[20] The above legal principles will be applied to the facts of the present case.

Extent of delay

[21] I now turn to discuss the extent of delay in prosecuting the review application as gleaned from the sequence of events after the delivery of the review application on 15 March 2012. The sequence of events has been comprehensively set out in the respondents’ founding affidavit from paragraphs 18 to 31[11]. This is not disputed by the applicants[12]. Hereunder I summarize the important events.

[22] Although not strictly required by the rules of this Court, on 3 April 2012 the respondents delivered their notice of intention to oppose the review application.

[23] On 4 May 2012 a directive was issued by the registrar of this court calling on the applicants to, inter alia, comply with rules 7A(6) and 7A(8).

[24] On 31 May 2012 the respondents’ attorneys wrote to the State Attorney representing the applicants enquiring about the status of compliance with rule 7A(6).

[25] On 8 June 2012 the State Attorney replied stating that the fifth respondent had set the matter down on 6 July 2012 to reconstruct the record.

[26] On 13 June 2012 the respondents’ attorneys responded stating that the reconstruction of the record was premature as there had been no communication from the fifth respondent that any portion of the record was not available thereby necessitating the reconstruction process. In the earlier correspondence the Respondents’ attorneys had already indicated, correctly so, that due to the limited nature of the grounds of review, the entire record of the proceedings would not be of assistance to the reviewing court. It must not be forgotten that the rules of this court require that only that portion of the record that the applicant wants to rely on to support its grounds of review must be filed. It is not permissible to transcribe the entire record as a fishing expedition hoping to find some evidence that may support grounds of review[13].

In any event the reconstruction meeting did not take place due to the unavailability of the applicants’ Mr Khumalo.

[27] On 20 June 2012 the first respondent, through his Trade Union NUPSAW, wrote to the fifth respondent, copying the State Attorney, and offered to provide to the applicants a CD or recording of the arbitration proceedings[14]. If the applicants were genuinely bent on obtaining the entire record of the proceedings they ought to have seized the first respondent’s

offer without delay, but they did not as it will become clear below. There is no doubt that transcribing the mechanically recorded

arbitration proceedings (regardless of who recorded same) is a better option than manually reconstructing the record.

[28] On 2 August 2012 the respondents’ attorneys wrote to the State Attorney and, inter alia, raised a concern regarding the applicants’ delay in prosecuting the review application and reserved the respondents’ rights to launch an application to dismiss the review application on the grounds of non-compliance with the rules. The applicants were also requested to furnish the respondents’ attorneys with details of attempts made to secure the record of the arbitration proceedings.

[29] Having received neither a reply nor further action, on 25 September 2012 the respondents’ attorneys wrote another letter to the State Attorney, as follows:

“We refer to our telefax dated 2 August 2012, annexed for your ease of reference.

We request an urgent response to our communication. We are entitled to be kept informed of your progress in compiling the record of the proceedings that you intend to rely on to prosecute the application for review.

We have stated repeatedly that, in our view, the grounds of review raised in the papers are of a limited nature and it does not appear that the record of proceedings will assist the grounds of review raised. We once again place on record that our instructions are that no evidence was led in regard to why reinstatement is not reasonably practicable in this matter. In those circumstances, the exercise of compiling an entire record of these proceedings appears futile.

As there has been no response to our communications, we can only assume that your client intends to rely on the record however is not taking the required steps to secure the record. Accordingly, should we not receive a response within seven (7) days, we are instructed to bring an application to dismiss the review on account of non-compliance with the rules of the Labour Court.”

(My emphasis)

[30] It is obvious that the above letter did not galvanize the applicants into any action because nothing happened until the respondents

brought this application on 20 February 2013.

[31] An incomplete record was eventually filed on 29 April 2013.

[32] Between May and September 2013 there were further letters from the respondents’ attorneys to the State Attorney urging the applicants to deliver a complete record and comply with rule 7A(8)(a) or (b). As at the date of hearing this application, approximately 22 months have elapsed after the applicants delivered their review application, yet the full record has not been filed and the

applicants have not complied with rule 7A(8).

[33] I have no hesitation in concluding that, within the context of this matter, the extent of delay in delivering the complete record and comply with rule 7A(8) is excessive and it cries for a detailed and comprehensive explanation from the applicants.

Explanation for the delay

[34] As indicated elsewhere, the sequence of events narrated by the respondents is not in dispute. All letters written by the respondents’ attorneys were received by the State Attorney. Against that backdrop, in an attempt to explain the delay, the deponent to the applicants’ answering affidavit starts off by stating that the applicants requested the fifth respondent to provide them with tape recordings of the arbitration proceedings[15]. It is not indicated what necessitated this request in the first place. It is also not indicated when this request was made. Was it before or after the registrar’s letter of 24 May 2012 referred to in paragraph [23] above? It is also not indicated how this request was made. There is nothing attached to the answering affidavit to suggest that it was made in writing.

[35] Then the deponent states that the fifth respondent could not assist and it became necessary for the parties to reconstruct the record[16]. There is no explanation in what respect the fifth respondent could not assist. The reconstruction meeting was scheduled to take place on 6 July 2012 but Mr Khumalo was not available due to prior work commitments.

[36] At paragraph 15 of the answering affidavit the deponent states that on 18 July 2012 the State Attorney advised the respondents’

attorneys that the applicants were not in possession of the record or any part thereof and they had requested a copy from the fifth

respondent. There is no explanation whatsoever as to how the applicants dealt with the first respondent’s offer made on 20

June 2012 to provide them with the CD or recordings of the arbitration proceedings.

[37] At paragraph 16 of the answering affidavit the deponent conveniently accelerates to November 2014 and states that immediately after the tapes were made available the State Attorney requested Sneller Recordings to do the transcription. There is no explanation

whatsoever as to what happened between 18 July and 14 November 2012, in particular how the applicants dealt with the respondents’

attorneys’ letters of 2 August and 25 September respectively. I also observe that, despite the lengthy delay that had already

endured, Sneller Recordings was requested to do the transcription at the normal rate, not even on urgent basis[17]. The deponent does not tell this Court when were the tapes made available and by whom.

[38] The deponent completes the explanation by stating that on 20 February 2013 the State Attorney wrote a follow up letter to Sneller

Recordings enquiring about the progress of the transcription[18]. By the way, 20 February 2013 is the same day on which this application was served on the applicants.

[39] Despite the glaring inadequacy of the explanation for the delay, at paragraph 19 of the answering affidavit[19] the deponent concludes by stating that “it is apparent from what is set out above that the applicants are doing everything

necessary to ensure that the review application is prosecuted”. The applicants have failed to provide an acceptable explanation for the excessive delay in filing the complete record and rule 7A (8) notice.

Prospects of success in the review application

[40] After some period of uncertainty as a result of different interpretations of the test for review espoused by the Constitutional Court in the Sidumo[20] case, it is hoped that the dust has finally settled. The proper test for review was authoritatively summarised by the Supreme Court of Appeal as follows in Herholdt v Nedbank Ltd (COSATU as Amicus Curiae) (2013) 34 ILJ 2795 (SCA) at [25]:

“In summary, the position regarding the review of CCMA awards is this: A review of a CCMA award is permissible if the defect in the

proceedings falls within one of the grounds in s 145(2)(a) of the LRA. For a defect in the conduct of the proceedings to amount to a gross irregularity as contemplated by s 145(2)(a)(ii), the arbitrator must have misconceived the nature of the enquiry or arrived at an unreasonable result. A result will only be unreasonable if it is one that a reasonable arbitrator could not reach on all material that was before the arbitrator. Material errors of fact, as well as the weight and relevance to be attached to particular facts, are not in and of themselves sufficient for an award to be set aside, but are only of any consequence if their effect is to render the outcome unreasonable.”[21] (My emphasis)

[41] The starting point for the reviewing court is to consider the material that was properly placed before an arbitrator. It follows

that an arbitrator cannot be justifiably criticized (let alone review his or her award) for not applying his or her mind to material that was not placed before him or her. The onus is on the parties to place all relevant material before an arbitrator.

[42] The limited grounds of review advanced by the applicants have been paraphrased above. In a nutshell the applicants submit that, as a result of the establishment of the second applicant and the subsequent transfer to the second applicant of the duties that were performed by the respondents whilst they were still employed by the first applicant, reinstatement is not reasonably practicable and the second respondent ought to have awarded compensation. It is apparent that the applicants are relying on section 193(2)(c) of the LRA as an exception to a primary remedy of reinstatement.

[43] The insurmountable hurdle in the path of the applicants’ review application is that the establishment of the second applicant and the consequent operational impact thereof was not brought to the attention of the arbitrator. It is common cause that the establishment of the second applicant took place after the commencement but before the finalization of the arbitration proceedings.

[44] During the presentation of oral closing arguments before the arbitrator the representative of the first applicant had an ideal

opportunity to bring to the attention of the arbitrator the establishment of the second applicant and consequences thereof, but

he did not. There is no explanation for this omission which I regard as fatal.

[45] The perusal of the transcript of the arbitration proceedings reveals that there was some debate before the arbitrator about the prejudicial effect of reinstatement given the delay in the finalization of the arbitration. However, this debate was limited to the effect of the delay on the relief sought and which party was responsible for the delay[22]. Again, this was a perfect opportunity for the first applicant’s representative to bring to the attention of the fourth respondent the establishment of the second applicant and the difficulties that would ensue if the respondents were reinstated.

[46] Even if I am wrong in my conclusion that the first applicant’s failure to alert the arbitrator to the establishment of the second applicant is a fatal omission, I am not convinced that the establishment of the second respondent constitutes a legal impediment to reinstatement of the respondents. A portion of the first applicant was transferred to the second applicant as a going concern. It is common cause that section 197(2) of the LRA was applicable to that transaction[23]. But for the dismissal, the respondents would have been transferred to the second applicant to perform the duties that were transferred to the second applicant. The difficulties cited by the applicants are nothing more than operational inconvenience which do not constitute legal impediment to a primary remedy of reinstatement.

[47] It is my conclusion that, for the reasons stated above, the applicants do not enjoy any prospects of success in the review

application.

Prejudice

[48] Prejudice to the respondents is glaring. They were dismissed in 2006 for misconduct allegedly committed in 2001 and 2002. The respondents ought to have been relieved when they obtained an award in their favour in January 2012, reinstating them retrospectively. However, that relief was short-lived when the applicants brought the review application. As a result of the review application the award has not been implemented more than 2 years after it was issued. The respondents’ employment life has been lingering in limbo for more than 7 years. That is unacceptable.

Conclusion

[49] For the reasons stated above, I conclude that the respondents have made out a case for the dismissal of the applicants’ review application for want of diligent prosecution thereof. The delay in prosecuting the review application is excessive and the applicants have failed to provide an acceptable explanation therefor. Most significantly, the applicants do not enjoy any prospects of success in the review application. Allowing the applicants to proceed with a hopeless review application is not in the interest of justice. Prejudice to the respondents is palpable, as already indicated above.

Costs

[50] What remains to be considered briefly is the question of costs. In exercising my discretion in terms of section 162 of the LRA, I have taken into consideration the drastic nature of this application and the fact that the arbitrator has already ordered the first applicant to pay the respondents’ costs of arbitration. The effect of the order I intend to make will resuscitate the employment relationship between the respondents and the applicants. There is a need to nurture that fragile relationship. I am of the view that a cost order against the applicants will strain the fragile employment relationship. As a result, I do not think it is appropriate to make a cost order against the applicants.

Order

[51] In the result, I make the following order:

1. The application to dismiss the review application in respect of the arbitration award issued under case number PSHS612-05/06 is granted.

2. The arbitration award under case number PSHS12-05/06 is to be complied with within 14 days of the delivery of this judgment.

3. No order as to costs.

____________________________________

S.B. Mgaga, AJ

Acting Judge of the Labour Court of South Africa

APPEARANCES:

For the respondents: Ms M. Naidoo

Nortone Rose Incorporated

For the applicant: Advocate M.A. Ngqanda

Instructed by:

State Attorney (KwaZulu-Natal)

[1] The words of Stratford AJA in Pathescope Union of SA Ltd v Mallinik 1927 AD 292 at 305.

[2] Review Application: Founding Affidavit: paragraph 5.2

[3] Transcript Volume 4, pages 359 - 360

[4] Review Application: Founding Affidavit: paras 17.12 and 21

[5] Review Application: Founding Affidavit: para 22

[6] Review Application: Founding Affidavit: paras 26.4, 27.2 and 27.3

[7] (2006) 27 ILJ 2337 (LC)

[8] The Practice Manual of the Labour Court of South Africa came into effect on 2 April 2013.

[9] Bezuidenhout v Johnston NO & others at [26] and Frans Meintjies New Tyre Manufacturers v Bargaining Council & others [2012] 6 BLLR 558 (LC) at [31]

[10] (2009) 30 ILJ 2937 (LC)

[11] Pleadings, page 8 to 10

[12] Pleadings, page 10, paragraphs 23 to 24

[13] In the applicants’ heads of argument (para 9) it is submitted that “the record is important for the parties to refresh

themselves as to what evidence was led at the arbitration and for this reason the entire record had to be made available”. It is clear that the applicants insisted on placing the entire record before a reviewing court for a wrong reason.

[14] Apparently Mr Malaitsane of NUPSAW had also recorded the arbitration proceedings and the parties were aware of this.

[15] Pleadings: Answering Affidavit, page 41, paragraph 8

[16] Pleadings: Answering Affidavit, page 41, paragraph 9

[17] Pleadings: Answering Affidavit, page 47 – Annexure AA

[18] Pleadings: Answering Affidavit, page 43, paragraph 17

[19] Pleadings: Answering Affidavit, page 43. There is no paragraph 18.

[20] Sidumo & another v Rustenburg Mines Ltd & others (2007) 28 ILJ 2405 (CC)

[21] See also Gold Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v CCMA & others (2014) 35 ILJ 943 (LAC) at [14] to [21] and Steelcor (Pty) Ltd v Mokwena NO and others (JR 812/2012) [2014] ZALCJHB 1 (17 January 2014) at [21] and [22]

[22] Transcript Volume 4 page 358 line 13 to page 361 line 18 and page 388 line 5 to line 11 and page 414 line 19 to page 415 line 13. There is no reason why the fourth respondent would not have applied his mind to the impact of the establishment of the second applicant if it was brought to his attention.

[23] Section 22 of the SASA Act provides that “(1) The transfer of staff of designated institutions to the Agency must be effected in accordance with the Labour Relations Act, 1995 (Act No. 66 of 1995), and any applicable collective bargaining agreement with organised labour.” Section 1 of the SASA Act defines designated institutions to include the first applicant.